Glimmer of Shine in the Cold Winter

The main reason for my new JNUG long can be found on the GDXJ (the straight-up junior gold miner ETF) daily chart, below. Note how the juniors ran higher this week to the upper Bollinger Band, rendering it overbought in the short-term (yellow arrows). But it is the circumstance under which the miners react to that overbought condition which is most interesting here. Instead of rolling back over, as they have done for a good while now after sharp rallies, the juniors refused to give back most of the gains this week. Anecdotally, I saw many traders eager to short the miners, which has yet to prove fruitful. Simply put, I am playing for the miners and metals to emerge this winter. Needless to say, these are fast-moving and risky instruments in a risky sector, still with much to prove. But as long as stop-losses are honored I believe the potential rewards can justify the risk.